The country's main factions are embroiled in a bitter power struggle. Emboldened by President Mohamed Morsi's overthrow in Egypt, the most populous Arab country, allies of Yemen's former leader Ali Abdallah Saleh have sensed an opportunity to stage a comeback.

Saleh's nephew Yahya, who once led the country's US-trained counterterrorism unit, told me his uncle will return to power in 2014. Saleh has not been able to swallow his pride since his family officially lost power early last year.

But there is one thing that nobody can deny here in Yemen: Saleh still retains huge power. The vast patronage system he built over three decades has tentacles everywhere. Many tribal leaders, bureaucrats, army officers and businessmen are still loyal to Saleh. If he is reinstated, they stand to profit a lot.

On the other hand, the Islamists, who now comprise the bulk of the governing coalition and seen as the real king-makers, are becoming nervous.

They interpret the clampdown on Egypt's Muslim Brotherhood as a campaign financed by Saudi Arabia and the UAE with the backing of Western powers to check the rise of Islamist parties in the Arab world.

They caution, however, that Yemen is not Egypt, and that if the Islamists in the Arabian Peninsula state are crushed, the entire region could plunge into violence.

Northern Houthis challenge

Then there are the Houthi rebels who belong to the Zaidi Shia faith in a Sunni-Muslim-majority country. They were barely known when they started a rebellion against the Yemeni government in 2004. Now they are emerging as one of the biggest and most disciplined faction in the country's north.

They say they want more political and religious freedoms. But the government and neighbouring Saudi Arabia accuse the Houthis of carrying the can for Iran and spreading Shia Islam in the region.

When I first went to their stronghold in Saada province, what drew my attention most was their slogans and their parades, which looked very similar to those of the Lebanese armed Shia group Hezbollah.

It was clear that Abdulmalek al-Houthi, the Houthis' young leader, drew inspiration from Hezbollah leader Hassan Nasrallah's rhetoric.

Combine that with the fact that the Houthis are heavily, and it is a no-brainer that if they feel marginalised they will move towards consolidating their grip in the north and push for autonomy.

South Yemen powder keg

The situation in South Yemen is no better; the region is a veritable power keg.

If an agreement can be reached between the Sanaa government and the secessionist leaders of the South, Yemen's transition to democracy will go ahead.

If the actors fail to do so, Yemen unity would be in jeopardy.

The secessionists argue that they joined the union in 1990 hoping to be real partners but they soon found themselves sidelined and discriminated against.

Buoyed by the Arab Spring revolts, they say they are determined to fight for an independent state. The Southern elites remain divided, however.

The South was ruled for decades by an authoritarian Communist regime that stifled dissent, but also built a strong sense of nationhood. Many are nostalgic for that period.

On the other side of the fence are the unionists who say Yemen must remain united if it wants to compete with regional powers.

Finally, Yemen has a big problem in the form of Al-Qaeda in the Arabian Peninsula, or AQAP, whose birth and rapid growth was Osama bin Laden's biggest achievement before his death in 2011.

AQAP's big presence

While al-Qaeda was suffering major setbacks in Afghanistan and Pakistan, he dispatched aides to Yemen, his ancestral homeland, in 2009 to launch an offshoot now regarded by many to be the biggest challenge to regional stability.

In the coming weeks, Yemenis are expected to wrap up a national conference, set up a committee to draft a new constitution, agree on what kind of political system they want and then hold election in 2014.

This at least is the plan.

In reality the situation is much more complex than the UN's carefully crafted statements about a Yemeni exception in the Arab world.

Perhaps the daunting nature of the challenges confronting their country will convince many Yemenis of the necessity of a roadmap to stability. The alternative is anarchy.